Half Year 2024 Bank of Ireland Group PLC Earnings Call Transcript
Key Points
- Bank of Ireland Group PLC (BKRIF) reported a half-year profitability of EUR1.1 billion, up 5% year on year.
- Return on tangible equity (ROTE) is strong at 18.9%.
- The company announced an interim dividend of EUR352 million, supporting its progressive dividend policy.
- Net inflows for New Ireland grew by 84%, reaching EUR2.1 billion, reflecting strong performance in wealth and insurance.
- The company upgraded its full-year capital generation guidance to 310-320 basis points from the previous 260-280 basis points range.
- International corporate and property books saw a reduction at a 3% annualized rate, reflecting a cautious approach given the global macro backdrop.
- Operating expenses are expected to grow by 5% to 6% for the full year, driven by inflation and additional investments.
- The company expects net lending volumes to be broadly flat in H2, with growth in Ireland offset by the exit of UK personal loans and rundown of UK corporates.
- The NPE ratio, although reduced to 2.9%, still indicates some level of non-performing exposures.
- The structural hedge's gross yield is materially below current swap rates, which could impact future income.
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Good morning and thank you for joining us. Today, we are reporting a half year performance. The theme is strategic delivery and sustainable returns. We are midway through our three-year strategic cycle and making excellent progress, as demonstrated by continued growth in Irish loans, in new customers, and assets under management. Our performance is also well supported by the interest rate environment. This translates into profitability of EUR1.1 billion, that's up 5% year on year and notably a return on tangible equity of 18.9%.
This performance supports upgraded earnings guidance for the year. Our business model continues to be highly capital generative, 170 basis points in H1. And today we are announcing an interim dividend of EUR352 million. This is an important component of our full year objectives, which are progressive dividends and the return of surplus capital.
Slide 6 gives a flavor of economic conditions in Ireland, which account for three-quarters of our profits. The Irish
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